CBR expects weakening of ruble in Dec to fan inflation in coming months

MOSCOW. Dec 20 (Interfax) - The weakening of the ruble that began in December and exceeded 5% by the middle of the month will have a pro-inflationary impact on prices in the next few months, the Central Bank of Russia (CBR) said in comments on inflation.

The ruble saw little change against the main foreign currencies used in trading - the U.S. dollar, euro and Chinese Yuan - in November, and in the past three months it weakened by an average of 0.8% against the dollar and 1.5% against the euro, while strengthening by 5.1% against the yuan.

"Overall since the middle of the year the exchange rate has been fluctuating in a moderate range. Taking into account the growing role of the yuan in foreign trade settlements, one can rather talk about a small disinflationary impact of the exchange rate dynamic on inflation," the CBR said.

As for the risk of world prices affecting inflation in Russia, in November they remained stable, the CBR said. World prices for agricultural and manufactured goods saw mixed changes in November in narrow ranges, the CBR said. The level of many prices (in rubles) was comparable to figures in 2020-2021, which did not generate significant inflationary risks, the CBR said. Restrictions concerning exports continued to be a significant disinflationary factor.

The growth of prices in Russia accelerated in November due to volatility, the CBR said. Consumer prices rose by 0.37% in the month and the seasonally adjusted increase was 0.26%, while annual inflation slowed to 11.98%.